“A bill to ban new corporate ownership of agricultural land, and for other purposes.”
No CRS summary available for this bill.
This section declares 11 congressional findings on the importance of the family farm system of agriculture to U.S. social, economic, and national security interests; the critical value of agricultural land; the three-fold rise in institutionally owned farm properties and increase in their market value from less than $2 billion to more than $16 billion from 2005 to 2025; the near-doubling of U.S. farmland prices since 2005; and the threats posed by expanding corporate and institutional ownership of farmland to family farmers, land conservation, local communities, and national security.
This section defines 17 terms used in the Act, including (1) "actively engaged in farming," which for natural persons or those associated with legal entities requires regular management decisions substantially affecting farm or forest operations or physical work significantly contributing to cultivation, stewardship, crop/livestock production, or food production (excluding solely providing capital); (2) "agricultural land," meaning cropland, grassland, rangeland, pasture, forestland, or other land used for agricultural or forest-related products or livestock (or idle land so used within the prior 10 years); (3) "authorized legal entity," limited to entities not owned by or subsidiaries of multilayer subsidiary entities, with no more than 25 natural person shareholders/partners/members/beneficial owners who are actively engaged in farming; (4) "multilayer subsidiary entity," encompassing privately held or publicly traded entities with two or more subsidiary levels, parent/subsidiary management or holding companies, or those using special purpose vehicles for intramarket transfers; and (5) "ownership interest" in agricultural land (excluding security interests, certain future interests, non-agricultural easements/right-of-way, and mineral rights solely).
This section prohibits an unauthorized legal entity from directly or indirectly acquiring or holding an ownership interest in agricultural land, subject to exceptions. Exceptions apply to (1) bona fide encumbrances for security purposes; (2) land acquired for research or experimental purposes, where commercial sales of products are incidental (i.e., less than 25% of gross sales of the primary research product) or the land is used primarily to test, develop, or produce public seed varieties or plants for sale to farmers as seed stock (with other commercial sales similarly incidental); (3) land acquired and operated by or for public institutions of higher education or related nonprofits for research, experimental, demonstration, or test purposes; (4) land acquired for immediate non-agricultural use (provided it remains in such use); (5) land acquired by process of law (e.g., debt collection or lien enforcement), which must be disposed of within 5 years (a covenant running with the land, during which it cannot be farmed except under lease to an authorized entity); (6) land owned by municipal corporations, certain nonprofits, fiduciaries, heirs' property owner entities, or authorized farmer or rancher cooperatives; and (7) land owned by a legal entity as of the date of enactment (provided continuous ownership thereafter).
This section establishes compliance requirements under the Act for legal entities acquiring or holding ownership interests in agricultural land. Specifically, it (1) requires a certifying affidavit, under penalty of perjury, at the time of any such acquisition after enactment; (2) requires an annual affidavit, under penalty of perjury, with the entity's federal tax return beginning with the first taxable year after enactment; (3) conditions eligibility for Department of Agriculture (USDA) programs or Farm Credit System participation after enactment on submission of compliance documentation; (4) renders any unauthorized legal entity holding an interest in agricultural land described in section 4(b)(1)(K) ineligible for such programs after enactment; and (5) directs the Secretary of Agriculture to submit annual reports to Congress, and publicly post on the USDA website, detailing violations discovered through these mechanisms.
This section establishes enforcement mechanisms for violations of the Act. It requires the Secretary to refer violations by legal entities to the Attorney General, who must investigate and may seek a federal court order for divestiture of agricultural land within one year (with public sale if not divested, akin to mortgage foreclosure), file notices and orders with county recorders of deeds, and enjoin prospective violations. It authorizes the Secretary to impose civil penalties up to two times the fair market value of the land per violation (with notice and hearing) and criminal penalties of up to five years imprisonment and fines for knowing violations by natural persons with ownership interests in unauthorized entities. It further authorizes state attorneys general to bring civil actions as parens patriae for injunctions, divestiture, damages, or other relief, including civil penalties of up to $3,000 per day of noncompliance (not to exceed the greater of $1 million or the fair market value of the interest).
This section authorizes states to regulate legal entities permitted to own agricultural land within the state at least as restrictively as required by this Act. Such regulation may include more stringent requirements, including stricter definitions of “actively engaged in farming,” notwithstanding any additional burden on owners residing in other states.